In what could be a small sign that a cross-licensing (and potentially damages) settlement agreement could be at hand in the legal war [1][2][3][4] [5][6][7] between Samsung Electronics Comp., Ltd. (SEO 005930) and Apple, Inc. (AAPL), Apple revealed that is former chief executive had sought out Samsung to discuss a deal, before he initiated the legal war by filing a civil suit against Samsung in Northern California District Court.

I. Did Steve Jobs Try to Cut a Deal with Samsung?

The revelation came, according to international news service Bloomberg, in testimony by Richard Lutton, a senior director at Apple and the company's patent attorney, during a hearing in Australian court. Apple is seeking to ban sales of Samsung's popular Galaxy 10.1 tablet in Australia, until a final trial decision is handed down in its Australian federal lawsuit against Samsung.

Samsung has agreed to temporarily delay the release of the tablet in Australia, allowing for the Australian judge to decide whether or not to agree to Apple's request of issuing a preliminary injunction banning Samsung's tablet sales. The decision was supposed to occur this week.

In testimony, Mr. Lutton painted Apple as the victim, rather than the aggressor in the patent war. He claims that Apple co-founder and chief executive Steven P. Jobs approached Samsung in July 2010 to try to negotiate with the company. It is unclear what exactly Apple suggested. One possibility is that it asked Samsung to stay out of the tablet market -- which would be very unfavorable for Samsung to agree to. Alternatively, it could have wanted payment for a cross-licensing deal, similar to the deal Samsung recently inked with Microsoft Corp. (MSFT).

Steven P. Jobs [Source: AP Photo]

Whatever Mr. Jobs' proposal was, Samsung decided it to be too adversive. Negotiations between the firms, which Mr. Lutton says did not involve Mr. Jobs (who is facing a health crisis) fell apart shortly thereafter. Samsung would go on to launch its first tablet -- the Galaxy Tab (7-inch) in September. The rest, as they say, is history and Samsung and Apple reached their current state of suing each other in at least 23 federal courts or trade agencies in at least 10 countries.

Mr. Lutton did have some kind words for Samsung commenting, "Samsung is an important supplier with whom we have a deep relationship."

Bloomberg says its research data indicates that Samsung is Apple's second largest supplier and that Apple is Samsung's largest electronics component client.

II. Samsung Proposes a Truce

In related news, Samsung's legal chief David Catterns has reportedly proposed a cross-licensing agreement in Australia, which would put the companies' legal conflict behind them -- in one country at least. The news was first reported by Bloomberg.

The news came shortly after Apple dropped two of patents from the case, patents that it initially planned to pursue infringement claims on. During the initial filing of the case Apple had claimed Samsung infringed on ten of its patents, then in a later filing it broadened that to a whopping thirteen patents. But in later court filings, its lead barrister Stephen Burley reduced the number Apple intended to enforce to five.

In other words Apple may still contend Samsung violates those other patents, it's just not expending resources trying to sue to assert them in court. This is probably because it thinks they're comprised of weaker claims, which risk being invalidated in court.

Now that number has been cut again. Apple excluded for unknown reason its patent on touch screen unlocking via a swipe gesture (patent AU 2008100011). And it also excluded its patent on a bouncing animation when zooming in on a document or icon (patent AU 2009208103, as Samsung agreed to remove this feature from its Australian tablets.

Now only three touch-related patents -- a patent on the manufacturing of a capacitive touch screen used in the iPad 2 and Galaxy Tab 10.1 (patent AU 2005246219), a patent covering selective rejection of inadvertent finger movements on a touch screen (patent AU 2008258177), and a heuristics patent used to correct a user's finger movements when scrolling vertically on a screen (patent AU 2007286532).

Apple has reduced its claims against Samsung from 13 to 3. [Source: Android Community]

Apparently Samsung wants to cross-license those patents. In exchange it will drop its claims agaisnt Apple regarding various wireless patents it owns, which it says Apple's i-devices violate. The terms of the cross-licensing proposal have not been revealed, so it's unclear whether Samsung would be seeking any additional payments from Apple, or vice-versa as part of the arrangement.

Apple lawyer Steven Burley reportedly said in court that his company would consider the proposal. Apple will have a bit of time to think it over. The sides failed to conclude their arguments on time today so the Judge did not rule on whether a preliminary injunction would be issued. The hearing is set to resume on Oct. 4, after a public holiday in New South Wales.

Federal Court Justice Annabelle Bennett commented, "I can't promise when I’ll make a decision. I will try to get it out as soon as possible."

A cross-licensing agreement could be a signal of the beginning of an international peacemaking process between Samsung and Apple. That could allow Apple to retain Samsung as its primary supplier of low-cost, high-quality NAND flash storage. In recent reports Apple was rumored to be considering a switch to other suppliers, but was expected to take a price, and possibly quality, hit if it did so.

quote: Samsung hasn't had any trouble coming to an accord with other companies in the past; it makes me wonder why they had so much difficulty with Apple.

I think that is because Apple is not looking for what most other companies are looking for.

Apple doesn't want licence income.

Apple doesn't want to swap licences unless it absolutely has to and then if it can do so on favourable terms (but it really doesn't want to).

What Apple wants is to ensure that design features it consider it developed and brought to market in order to improve it's products, and thus differentiate them in the market, are not copied.

Apple put years of development into iOS and it's first release was very polished and feature complete for a version one of a completely new operating system. Apple has iterated upgrades to the iOS at a fairly fast pace adding features and maturing their OS. Along the way it patented a lot of the nuts and bolts of that OS and its UI. A very good example is the rubber banding effect in list scrolling, a patent which features in many of its legal actions. Apple is determined to prevent large scale pilfering of it's interface features by Android OEMs and thinks (correctly in my opinion) that if it wages a large war of legal attrition it can succeed in getting a lot of those copied features removed from Android devices. That wouldn't stop Android devices from being sold or being functional but it would remove some of the gloss borrowed from Apple and help differentiate the Apple device experience from Android. In order to achieve that Apple is clearly waging a very wide and hard legal battle and it is succeeding in a small steps. The work underway by Samsung to remove the rubber banding and replace it with it's own, less optimal, UI feature to indicate the arrival at the end of a scroll is a good example of what Apple would consider a success.

The other broad front is of course simple hardware copying where again Apple is not interested in letting others build what are clearly intentional copies of the look and feel of Apple products, not least because those other non-Apple clones are less well made will thus tarnish Apple's prime brand.

Apple's seeking of product ban injunctions is not to permanently ban Android devices, something obviously impossible to achieve, but to use threats of product bans to press companies like Samsung into stop copying.

So I would imagine what Jobs said to Samsung was 'do the right thing and stop copying our stuff, we want to be billion dollar customers of yours, but if you persist we can look elsewhere and we will sue your asses off'.

I think Apple will win enough of its legal actions to eventually bleed quite a bit of borrowed polish from the various Android variants. In the meantime Apple will continue to do what is has always done which is to skate towards where the puck is going to be and innovate faster than it's competitors can match: the iOS 5 launch next week is a much bigger deal than most people expect. And it is, I am sure, patented.

quote: Samsung put years of research in their wireless patents. Why don't we hear their arguments too and consider a ban for ipad 2?

I don't know but I presume if they could they would. Do you actually think that Samsung is more ethical than Apple?

They are both big companies with serious professionals running them and that includes their legal teams, both will seek the best legal strategy to optimise their advantage, to do otherwise would be negligent. That doesn't mean, of course, that the portfolio of weapons in their respective legal armouries are necessarily equal and neither does it mean that they are necessarily strategically as competent as each other.

Samsung, I am sure, would love to do some sort of patent swap so they can continue to copy Apple's hardware look and aspects of the iOS, I am sure Samsung considers that to be 'normal' business practice: unfortunately Apple does not as I explained.

You guys seem to be missing the point. If Apple copies stuff that belongs to other people without their permission, where such permission should have been sought, then those people should sue Apple and seek redress in the courts. The rule of law is a good thing and should apply to all. What's the alternative?

quote: Samsung put years of research in their wireless patents. Why don't we hear their arguments too and consider a ban for ipad 2?

Because Samsung chose to monetize this research by having it embedded in a standard, which carries with it certain duties regarding allowing EVERYONE to use that research at particular prices (FRAND terms).

This was SAMSUNG's choice --- they COULD have chosen to keep that research private to Samsung, and tried to monetize it some other way. They felt (quite likely correctly) that making a small amount of money on billions of units was a better choice than making lots of money on millions of units. BUT, once they made that choice, they have to live with it.

Once again, this is not a morality play; it is about business strategies, not about good vs evil.

I won't argue that Apple put years into development into their iOS but their approach to the patent process are ethically horrendous! You can throw the "any big company would do it" argument but if we take your approach to be true, I would expect to see Sony, LG, Panasonic and Samsung patenting a "thin TV" and ignoring the fact that market forces deem a "thin TV desirable".

How one patents a "fat iPad" design and never actually uses it and maintains a lawsuit on the basis of producing a "thin iPad" and patent for a "fat iPad" is really a front to what the patent process is made to protect. Their desire to patent multi-touch technology in all shapes and forms is equally on par with their past claims.

I approve of patenting of the technology but not of patenting one variation of multi-touch and expanding that technology to essentially invalidate all other forms of multi-touch technology.

That's the biggest reason why I would argue most consumers are quite upset with Apple. As Steve jobs once said "great artists steal" and that is what Apple is in fact doing. I remember when in the US the Japanese car market came in and simply made better, more fuel efficient cars and the car companies and the lawmakers they supported did everything they could to fend off Japanese imports of cars. Android, regardless of whatever metric you use, is eating at iOS and rapidly.

Apple is now like the US automakers in the 80's complaining about Japanese cars; instead of focusing on their product a bit more, their trying to focus on changing public law and opinion to their side. And if you need evidence of their desire to "not focus" on their product, switching to an inferior chip and touch screen for a more costly iPhone to avoid Samsung is all I'd need to point out. A pricier phone with less powerful hardware.

What a lot of hot air and puffed up indignation - to argue what? That most company's, except evil Apple of course, don't sue other companies because of some higher principle. What utter nonsense and piffle. All large companies that thinks their patents, designs, trademarks, copyrights or IP have been infringed in a way that will stand up in court will sue. All of them. The key phrase there is 'stand up in court'. If Apple's claims are not justified I think that due legal process and argument in open court is the way to resolve it, just like any other such dispute. The main difference in Apple's position is that it is not content with swapping licences and it doesn't want to extract a licence fee, Apple wants to stop other company's from copying their stuff. Period.

Can anybody here honestly argue that Samsun have not tried to copy Apple's designs in a blatant way? What really offends Apple phobes about about Apple's legal actions is that Apple will probably win quite a lot of the. It's Apple winning that freaks you out.

By the way I loved your 'A pricier phone with less powerful hardware' comment - man you techie conservatives really don't get it do you? You actually think that consumer make choices about what devices to buy because of hardware specs? Hardware specs mattered in the the PC wars but the PC wars are over and, surprise, surprise, the PC lost. What matters to consumer is the total value and experience of a device. Irrespective of the hardware are iPhones experienced as actually performing worse than Android handset - no - quite the opposite. Do iPhones offer less value than Android phones - of course not because Apple's value stack is best of class. Ask an average consumer what the processor is on an iPad, or how much memory it has, of what the graphic chip it contains - only 1 in a 100 could answer those questions because they don't matter, it's not a useful criteria with which to make a buying decision. Specs only matters to a few weird hobbyists.

Hardware matters alot. If it didn't then why does apple change the hardware in the phone dam near every year. Could it be because other manufactures do and apple doesn't want to look like complete shit with their offering? And pc lost since when pc lost are you High on LSD ecstasy and hash combined ? And don't give me the whole market moving to moblie shit even idots who buy tablets still own notebook pcs (this includes Mac idot ,you do understand apple computers knowen as Mac book pros are personal computers right?). Pcs aren't going anywhere . youll come up with some twisted shit to claim other wise. You spout wired hobby for hardware, nice to know you are one of the idot consumers. People who don't do research before buying are idots. Just like those who buy for Looks over function. IOS feature rich huh. Really it is since when ?My first $700 iPhone what the calling it now the 2g lolFeatureless untill I jailbroken it and to save time typin on this iPhone 4 I now own. iOS 1-4 useless as tits on a boar hog untill it was jailbroken. And what you'll say only tech people care about that. wRong I can't even keep track how many times some brainless person who bought an iPhone because thier friend had on becomes so jelly over the shit I can do on my phone which leads to me jailbreaking thief phone. Prime examplesMms , video camra , copy paste, download videos, download music, custom icons start up screens ECt , modified picture folders , the list goes on from ios1-4Note Tony these were the tyipcal brain dead consumer apple thrives on. Not a techy which I guessI would be considered. AppleThrives of the jailbreakingCommunity just like it does with dolphin and Linux. In which appleCopies everything but hey it's apple so it's ok the double standard say no one else can says the lord Steve jobs. AppleGave bullshit aboutMms even tried to scapegoat AT&T for it. Took a 19Year old kid less then a week to get it functioning. Apple claimed it was complex to bringMms really it was ?Copy paste high tech shut another colledge kid gives us thisThrough jail breaking. I could continue all day longOn this alone. I already have iOS5. Guess what still need to jailbreak it and 23 programs to get the thing to function feature "rich". And all the features I use those drain dead consumers love. Don't have to be a tech to want what's good. Even the brain dead consumers want features apple still withholds in ios5. Spring board settings, quick camera, quick mms (that doesn't take you out the program you are using to respond to your mms/SMS) list goes on. Ya ya grammar nazi me becuase I said brain dead consumer so much.Post on my jailbroken iPhone 4 32 gig black.

quote: I think that is because Apple is not looking for what most other companies are looking for.

Apple doesn't want licence income.

Apple doesn't want to swap licences unless it absolutely has to and then if it can do so on favourable terms (but it really doesn't want to).

Absolutely right. what Apple want is to drive all competition out of the market, so they can have a monopoly control. The reason they want this is because their strict control, walled-garden approach has failed to maintain dominance of the market in the past. They know it is at risk of being overwhelmed by open platform products again.

As a company that thrives on the position of "low market share, high profit margin," Apple is always conerened about fluctuations in its market share. Where minor fluctuations in market share can be easily absorbed by companies with a "large share, low margin" approach, Apple is always at risk from small changes in their sales. A small drop in sales means a large drop in profits.

Consequently, it is in their best interests to keep the competition to a minimum. The more competition, the more chance of their market share fluctuating at every product release. What is immensely high now could become unsustainably poor in one generation is the market shifts against them. They can't risk that - hence the need to try and litigate all potential competition out of the market.

What absolute hysterical nonsense - you really need to get a grip. I know the rise of Apple has scared you witless but you really should try to calm down, they are not out to get you personally :)

Lets run through this one by one.

quote: Absolutely right. what Apple want is to drive all competition out of the market, so they can have a monopoly control. The reason they want this is because their strict control, walled-garden approach has failed to maintain dominance of the market in the past. They know it is at risk of being overwhelmed by open platform products again.

There is not shred of evidence that Apple's business model is monopolistic. In fact Apple has entered three entirely new markets in the last decade, each full of existing and strong competitors, and went on to disrupt and make vast profits in each one through product innovation and massive success with consumers. Nothing about those markets, or Apple's business model in any of those markets, indicates that Apple has some sort of monopolistic stranglehold.

Secondly how could Apple 'drive out all competition'? Through legal actions? Surely it must be obvious that it is impossible for any company to somehow engineer the worlds legal system to crush it's opponents. That's the stuff of silly adolescent paranoid fantasies. Apple sue people who copy their designs in software and hardware, and they sue aggressively. Apple will win some legal cases and lose some, but even if they won them all their competitors could continue to make phones, and music players, and media devices and tablets.

quote: As a company that thrives on the position of "low market share, high profit margin," Apple is always conerened about fluctuations in its market share. Where minor fluctuations in market share can be easily absorbed by companies with a "large share, low margin" approach, Apple is always at risk from small changes in their sales. A small drop in sales means a large drop in profits.

More silliness. For a start Apple has a large share of the smart phone market (it makes the worlds' best selling smart phone handset) and a huge share of the total tablet sales. Neither of those things are likely to change in the near future. Android tablets are nowhere in the market, not because of Apple's legal actions, but because consumers don't like them and they really do like the iPad a great deal. In fact there is no such things as tablet market - there is just an iPad market. That will probably change with the Kindle Fire which will probably sell quite well and sit in exactly the market segment that will permanently shut out Android and Window tablets whilst having no impact on iPad sales.

quote: Consequently, it is in their best interests to keep the competition to a minimum. The more competition, the more chance of their market share fluctuating at every product release. What is immensely high now could become unsustainably poor in one generation is the market shifts against them. They can't risk that - hence the need to try and litigate all potential competition out of the market.

Even greater silliness! The old 'Apple is doomed' meme! Every scrap of evidence from the last ten years indicates that Apple is the best managed tech company with the most coherent and long term strategic vision in the business. I am sure Apple has its product pipeline planned out for several years ahead. The result is that in just four years Apple has created an entirely new business, the iOS device business, that on it's own is bigger and makes more profit than the whole of Microsoft. Apple will be as big in the world of mobile devices (already is in fact) as proportionately Microsoft and Intel were combined in the old PC world. But not through monopolistic practices. Anybody can compete with Apple for the affections of fickle consumers, its just none have been as good as Apple at this game.

What really scares you Apple phobes is just Apple's success. Hence the faux outrage over legal actions. I sympathise, if I was Apple phobic this would be a very bad time with no sign of any relief in the near future. Of course the way to get some relief and feel better is to stop being so phobic.

When asked, before he rejoined Apple, what he would do to save the ailing Apple Steve Jobs said he would milk the Mac for it was worth and look for the next big thing. And that's just what he did.

Why is it you turn everything into a schoolground "us vs. them" slagging match? You really ought to grow up and dispense with the "Apple is making you run scared" stupidity.

I didn't even say that Apple were doomed, but that's what you read into my post - simply because you see anything anti-Apple and assume.

Your the one who needs to get a grip, calm down and actually READ what people are saying, extrapolate the point from the post and comment accordingly. Otherwise you end up coming off like a rambling Apple fanboy.